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Funding is the mechanism that keeps a perp’s price tethered to its underlying. Periodically, the side of the market trading at a premium pays the side trading at a discount, in proportion to the gap between the perp price and the oracle price. When the perp trades above the oracle, longs pay shorts; when it trades below, shorts pay longs. There is no fee taken by the exchange on funding — it is a transfer between traders.
This page is conceptual. Live and historical funding values are available from GET /v1/fundingRates and the funding WebSocket channel.

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The basic model

The funding rate is driven by the basis — the gap between the perp’s price and the oracle price. A persistent premium produces positive funding (longs pay), which incentivizes traders to close longs / open shorts and pulls the price back toward the oracle; a persistent discount does the reverse. This is the same convergence mechanism used across perp markets.
Base rate. With no premium, funding sits at a base rate: 0.01% per 8h for crypto perps, and SOFR + 0.5% per year for real-world-asset perps. The premium (below) moves the live rate above or below that base.

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How the rate is calculated

Funding is charged once an hour, and each hour’s rate is built from two pieces:
  • a base rate — the baseline cost of holding the position, charged even when the perp trades right at fair value; and
  • a premium — an adjustment that grows as the perp drifts above or below the oracle, nudging the price back.
The premium is sampled about once a minute, and the rate for the hour is the median of that hour’s samples, so one brief spike can’t swing it. Throughout, clamp(x, ±y) just means “keep x within the range −y to +y.”

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Step 1 — adjust the oracle to “today” (real-world assets only)

Stocks settle a day or more after they trade (T+1), so a live stock price isn’t directly comparable to a perp you hold continuously. For RWA markets the oracle is nudged to a same-day value before the premium is measured (crypto settles same-day, so this step does nothing):
days_to_settle is the calendar days until the stock settles (usually 1), and sofr_rate_hourly is the RWA base rate expressed per hour:
SOFR (Secured Overnight Financing Rate) is the standard benchmark for the cost of borrowing US dollars overnight, published daily by the New York Federal Reserve — the same reference traditional finance uses for short-term funding. sofr_rate_hourly is simply that annual rate plus 0.5%, divided down to a per-hour figure. The effect on the oracle is tiny. Example. AAPL oracle = $200, base rate ≈ 5%/yr (so sofr_rate_hourly ≈ 0.00000579), T+1 settlement → 200 / (1 + 0.00000579 × 24 × 1) ≈ $199.97 — under 3 cents.

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Step 2 — measure the premium

The premium is how far the perp trades from the oracle price, as a fraction of the oracle. It uses impact prices — the average price to buy or sell a fixed test size by walking the order book — instead of the best bid/ask, so one tiny quote can’t distort it:
  • perp above the oracle (impact bid > oracle) → positive premium → longs pay shorts
  • perp below the oracle (impact ask < oracle) → negative premium → shorts pay longs
  • oracle sitting between the impact bid and ask → premium is zero
Example. BTC oracle = $100,000, and buying the test size would cost $100,050 on average → premium = (100,050 − 100,000) / 100,000 = 0.05%.

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Step 3 — turn the premium into the hourly rate

By convention the full premium is paid off over 8 hours, so each hour charges one-eighth of it on top of the base rate, and the total is capped at ±4% per hour. Crypto — base rate 0.01% per 8h (≈ 10.95% per year). A small dead-band holds funding exactly at the base rate until the premium moves more than 0.05% away from the base level, so trivial premiums don’t add funding noise:
Real-world assets — base rate SOFR + 0.5% per year (sofr_rate_hourly, from Step 1), with no dead-band, so the premium always counts and the rate lands exactly on the base rate when the perp trades at the same-day oracle:
Example (RWA). With sofr_rate_hourly ≈ 0.00000579 and a perp trading 0.08% above the same-day oracle (premium = 0.0008): funding_rate_hourly ≈ 0.00000579 + 0.0008/8 ≈ 0.0106% for the hour.

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Step 4 — the payment

Funding values the position at the oracle price (unlike margin, PnL, and liquidations, which use the mark price). A positive rate means longs pay shorts; a negative rate, the reverse. Example. At 0.0106%/hr on a $10,000 position, a long pays about $1.06 that hour. Outside extended trading hours (04:00–20:00 ET) this whole calculation is suspended and the rate is locked — see Off-hours funding below.

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Real-world assets

For perps on equities, commodity ETFs, and index ETFs, funding does more than close the basis: it also passes through the events that drive a real holder’s return — dividends, splits, and futures rolls — so the perp tracks the total return of the underlying. Those mechanics are covered on Real-world asset perps.

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Off-hours funding

The lock applies only when the underlying is fully dark — outside extended trading hours, i.e. overnight from 20:00 to 04:00 ET (and weekends/holidays). Then there’s no reliable oracle to measure a premium against, so the live calculation above is suspended and funding is locked to the base rate (SOFR + 0.5%), fixed at the close. During premarket (04:00–09:30 ET) and after-hours (16:00–20:00 ET) the underlying still trades, so funding runs live, exactly as during the regular session. This removes funding uncertainty for traders carrying a position overnight or over a weekend, beyond the price of the underlying itself. Crypto perps have no off-hours regime — funding stays live and basis-driven around the clock. Off-hours also raises margin and constrains prices to widening bands; those guardrails are covered under Real-world asset perps (and Margin).
Regular-trading-hours calendars differ by market, and the exact premium sampling and clamp parameters are per-market config. Read live funding from the API rather than recomputing it.